Posted on 05/08/2010 10:12:55 AM PDT by NormsRevenge
WASHINGTON (Reuters) – Financial reform legislation being debated by the Senate needs to overhaul government involvement in U.S. mortgage finance giants Fannie Mae and Freddie Mac, Senator Richard Shelby, the lead Republican on the Senate Banking Committee, said on Saturday.
As the Senate moves toward a final vote on the bill in the coming weeks, Shelby said it must include reforms for Fannie and Freddie to address the root cause of the recent financial crisis.
"For decades, these multi-trillion dollar institutions leveraged the implicit backing of the American taxpayer to encourage mortgage lending to people who could not afford to repay the loans," Shelby said in the weekly Republican address.
"But when home prices finally collapsed, these ticking time bombs exploded, saddling taxpayers with hundreds of billions of dollars of debt," he said.
Shelby, who has led negotiations on financial reform for Republicans, introduced an amendment to the bill last week with Senators John McCain and Judd Gregg.
If adopted, the amendment eventually would strip the agencies of their mandate to promote affordable housing and reduce the government's role in mortgage finance.
Shelby also said a proposed consumer protection watchdog bureau in the Federal Reserve would raise costs for small businesses and consumers.
(Excerpt) Read more at news.yahoo.com ...
Ya think?
Along with some indictments.
Looks like Shelby's got 'em.
Someone tell Shelby to start jailing Fwank and Dodd on RICO Fannie and Freddie.
Dec 11, 2006 SUBJECT Rep. Barney Frank (D-Mass.) speaking at a Treasury forum on ntl housing policy. Three weeks later, Frank became Chair, House Financial Services Committee.
Dec 11, 2006 On Democrats taking over regulatory reform: “You will see far less difference with Democrats taking over in the Financial Services regulatory area than in virtually any other area of public policy, because we did work together on things like regulatory relief and we have more to do yet in the deregulation. One of the things we did was try to reduce the reporting requirements from the banks to the financial detectives. “Far too much has to be reported now in my judgment.”
Dec 11, 2006 On Fannie Mae and Freddie: “We weren’t doing anything for Fannie Mae and Freddie Mac. The issue for me was housing. We were doing something for housing. And I agreed with those who argued that because of the markets’ perceptions, Fannie Mae and Freddie Mac got this great benefit to be able to borrow money cheaply yet the benefit was not being adequately returned to the public. “There were two things you could have done about that. You could have reduced the benefit. You could have cut back on their ability to borrow as cheaply or you could leave that benefit in place and distribute it more fairly. That’s what we chose to do with the affordable housing fund.”
Dec 11, 2006 On the housing bubble two years before it burst: “I do want to address this thing about the bubble. I think the bubble is an entirely inappropriate metaphor. Let me just be very clear, houses ain’t tulips. Houses today even with the drop in housing prices are more valuable than tulips were however many years ago when we had the tulip business.”
Dec 11, 2006 On plummeting housing prices: “I think it’s a good thing that housing prices are dropping. A few speculators get stung, that’s icing on the cake. The cake is… the cake is that people can afford to buy houses now. A 10% drop in housing prices is a good thing. Housing was over-valued. “But let me make this distinction on why it’s not a bubble. I was just thinking about this [unintelligible]… maybe housing suffered from irrational exuberance. But bubbles in history haven’t been cases of irrational exuberance. They have been cases of exuberant irrationality. And there really is a distinction. “Irrational exuberance means you get a little carried away with something that is basically a good thing. But exuberant irrationality is when you start thinking that tulips or some of those dumb ideas on the internet when there were some of those things that nobody in their right mind wanted to buy, those were excessive.”
Dec 11, 2006 On why plummeting housing prices is a good thing: “Fundamentally I don’t think that there’s a crisis, and I do think that the end result in a 10% drop in many parts of the country will be a more rational and healthier housing market.”
Dec 11, 2006 Frank on his own inability: “I’m pretty good with words but I’m not so good with things. I’ve had a lifelong struggle with things. And the less I am responsible dealing with them the better off everybody is.”
In 1991, the year his live-in boyfriend, Herb Moses, was hired by Fannie, the Boston Globe reported that Frank pushed the agency to loosen regulations on mortgages for two-and-three-family homes, even though they were defaulting at twice and five times the rate of single homes, respectively.
Three years later, President Clinton’s HUD tried to impose a new regulation on Fannie, but was thwarted by Frank.
Clinton now blames such Democrats for planting the seeds of today’s economic crisis. ‘I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac,’ Clinton said recently.”
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RAHM EMANUEL'S ROLE As a Congressman, Ohaha's COS Rahm Emanuel worked to pass a bailout of Fannie and Freddie, cosponsoring the Housing and Economic Recovery Act of 2008, which also dissolved OFHEO. It moved their regulatory authority to the Federal Housing Finance Agency (FHFA), which took Fannie and Freddie under conservatorship in September 2008. The same act abolished the Federal Housing Finance Board (FHFB) and replaced it with the FHFA.
After Mr. Emanuel was named Obama's Chief of Staff, the White House denied a Chicago Tribune Freedom of Information Act request for information on his Freddie Mac activities: “The Obama administration rejected a Tribune request under the Freedom of Information Act to review Freddie Mac board minutes and correspondence during Emanuel’s time as a director.
A 2003 report by Freddie Mac’s regulator indicated that Freddie Mac executives had informed the board of their intention to misstate the earnings to insure their own bonuses during the time Mr. Emanuel was a director.
But the White House refused to comply with a Freedom of Information Act request from the Chicago Tribune for those board minutes on the grounds that Freddie Mac was a “commercial” entity, even though it was wholly owned by the government at the time the request was made.
The Ohaha White House, under the influence of Rahm Emanuel, (who controls the US Treasury) is moving a trillion-dollar Treasury slush fund into corruption-riddled companies with no oversight in place. This will allow Fannie and Freddie to continue to purchase more toxic assets from banks, acting as a back-door increase of the TARP without congressional approval.
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